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How will getting the Canada Emergency Response Benefit (CERB) affect how much income tax I have to pay?

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How will getting the Canada Emergency Response Benefit (CERB) affect how much income tax I have to pay?
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CLEO (Community Legal Education Ontario / Éducation juridique communautaire Ontario)
CLEO (Community Legal Education Ontario / Éducation juridique communautaire Ontario)

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How will getting the Canada Emergency Response Benefit (CERB) affect how much income tax I have to pay?
Reviewed: 
May 7, 2020
Answer

Most employees have taxes taken off their paycheques throughout the year. So, at tax time, you likely won’t pay anything extra because your employer has already taken the taxes from your paycheque.

Payments that you get from the Canada Emergency Response Benefit (CERB) are different than a paycheque. Taxes on the CERB are not taken off before you get the payments. And CERB payments are taxable.

When you do your taxes next year, you’ll have to list the CERB payments as income. And you’ll be taxed on the amount you get from the CERB.

This means you’ll probably have to pay extra at tax time. So, if you can, try to save some of the CERB payment for your taxes.

How much tax you’ll pay

The amount of tax that you pay is based on how much money you make. If you make more money, you pay more taxes.

You can get an idea of how much tax you’ll need to pay using this tool. The tool does not give an exact amount. But it gives you an estimate.

The CERB will increase the amount of income you have during the year. This will increase the amount of tax you have to pay in the same way as earning more income from work.

If you’re an employee, your taxes have probably already been deducted from your paycheque. So, you’ll have paid taxes on your income from work. This means that most employees will pay tax only on the amount they get from the CERB.

For more information about the CERB, read Who can get the Canada Emergency Response Benefit (CERB) and how do I apply?

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